Slope of Hope Blog Posts

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Bears Will Be Bears

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Another classic V shaped day with a very strong gap down where the gap was filled by the close. Pretty much par for the course for the feeble bears of 2014 and unlike the low on Monday last week, the low yesterday is a decent candidate for a post 5 DMA run retracement low.

Yesterday morning I gave my target range on SPX for this retracement as 1995-2033, with a likely retracement low time area between yesterday and tomorrow with an ideal low made today. Yesterday’s low was at 2034.17, so that was effectively a hit of the target range, within the target time window. I’m counting that stat as played out now, and any further downside is a bonus before the continuation upward that I am expecting.

On the daily chart the low yesterday was two points above the lower band, which I count as a hit, and the close was two points above the middle band, which I count as a hit of the middle band rather than a break back above it. We may see a reversal back down here at the middle band, but if we see a close (3+ points) back above that today the break back up should be respected. There are still open daily sell signals, but they won’t be invalidated unless RSI breaks back above the higher of the divergent RSI highs, and after this retrace we could run up to over 2100 without invalidating these. SPX daily chart: (more…)